Motivated by the current (2011) political climate in Wisconsin it seems reasonable to devote some time and effort to comment on issues and some of the hyperbole. So we in the public should do what we can to help focus "journalists" on delineating real facts versus spin. If you accept the spin you do not understand the policy implications.

Thursday, August 11, 2011

UPD: Bankers tell stories but politicians are worse!!

Several years ago (~early 2008) in reading The Black Swan (not the movie) by Nassim Nicholas Taleb I was reminded about how many times bankers and financial markets have got all of us into serious trouble. Test yourself - what previous financial catastrophes or disasters can you recall. I am sure you can all remember the current one, let's call it "derivatives" or maybe "real estate crash" - the latter probably makes it more personal and memorable.

Within our lifetimes anyone remember one from the 1980s or the savings and loan crisis! I am not going to go into them - but read the book - I hope you are curious enough to do so!

My takeaway from Taleb is that we collectively buy into and make up stories about events. The worst of this is when we get the story wrong or perhaps do not even recall the past. At the same time groups such as ALEC (American Legislative Exchange Council) act over a very long time horizon pursuing the goals of special interests, such as the Koch brothers, among many other targets. Politicians buy into these agendas because (my narrative) they present what the politicians need to get elected - support from well organized groups, money and "pre-packaged ideas". We the consumer only discover far too late what has been going on ... and then bankers and politicians start making up stories to exempt themselves from accountability.

They blame Keynes, the economist. They blame regulation. They blame NAFTA. They blame bankers. They blame Wall Street. They blame the other politicians.

As Pogo said, "We have met the enemy and he is us."

Do I have a point? Stay alert, even skeptical, stay informed, remember the past and realize that "politicians" may be well intentioned but whose methods and motives may not be well understood even by them!